Maharashtra Rent Act may exempt commercial establishments

Mumbai: The Maharashtra government has proposed in its yet to be released housing policy that all commercial and residential establishments will be excluded from the Maharashtra Rent Control Act which prohibits landlords from levying market rents.

However, a Housing Department official, on condition of anonymity, said that Maharashtra Housing Minister Prakash Mehta was not kept in the loop while formulating the policy and that no establishment can be excluded from the Rent Control Act.

"There are massive internal differences between Prakash Mehta and Principal Secretary for Housing Satish Gavai. This policy, which has now been sent to the minister was not made keeping him in the loop. This case is before the Supreme Court from May 1, 1996 and is being heard by a 16-member bench. Until the case is settled, the state government has no authority to amend the Act," the official said.

According to the proposed policy, all commercial establishments occupying more than 500 square feet and also those living as tenants in residential homes bigger than 862 square feet will not be protected under the Rent Control Act.

"However, tenants occupying more than 46.5 square metres of commercial area and 80 square metres residential area, shall be entitled to continue to occupy rented premises so long as he or she agrees to pay the market rent as per principles contained in the ready reckoner rate manual. The landlord will not be entitled to evict the tenant so long as the tenant pays the market rent," the report states.

To ensure that the amendment does not lead to a sudden increase in rents, a provision has been incorporated that for the first three years the tenants will be liable to pay only 50 percent of the market rent and 100 per cent of the market rent from the fourth year onwards.

The landlord cannot levy a market rent that is more than 30 per cent of the annual income of the tenant

The new amendment stipulates that senior citizen tenants will be liable to pay 50 percent of the market rent or 15 percent of his/her annual income, whichever is lower.